3 Value Adds to Serve Clients Better (Nov. 8)

3 Value Adds to Serve Clients Better (Nov. 8)

Hi everybody this is Sandi Smith Leyva and we’re back for 3 Value Adds to Serve Clients Better. I think you’re going to love this session with Christy Ross of Bill.com. I want to thank all of our Gold sponsors – Xero, Intuit, Avalara, ScanWriter, Cloud9 and Bill.com. Also, our media sponsor Accounting Web.

I think we’ve covered this enough today but just in case if this is the first seminar you’ve been on for CPE you’ll need to be on the line for at least 50 minutes and you’ll need to answer all 3 polling questions and I’m really fast at them and so that’s one thing you’ll want to be watching for.

Now the person on this session, one of you lucky listeners will get a Doxie 1 Scanner from Bill.com and thank you for that.

I want to introduce Christy Ross, the Vice President of Strategic Partners for Bill.com. I’m absolutely thrilled to have her; she has tons of great experience. She has managed an e-commerce retailer, she has worked in cash management at a bank, she is an Intuit employee and so many people are it seems like and she’s had a really big role in working with Quicken.com which is totally exciting and responsible for a lot of online banking services, which I think is a tremendous strength on the QuickBooks and Quicken platforms.

Interestingly enough Christy has a BS in Molecular Biology. I almost can’t say it this late in the day Christy. She is a Harvard grad. You guys are in for a treat. We haven’t done this for a while but how about some virtual clapping for Christy. The way you do that is you raise and lower your hand and I don’t know if you can see this Christy, I think only the organizers do but we have all the hands going for you. You had a virtual clapping.

I’m going to turn the reigns over to you and let you drive for most of the presentation.

Thank you so much and what an introduction that was. I hope I can live up to that.

Welcome everyone and just a quick agenda to tell you what I’m going to cover today. the first thing we want to talk about is looking at client accounting services and what are some of those pitfalls today that we’re involved in dealing with the manual process. Then I want to introduce 3 new value added services for your clients that really Bill.com makes available to you. Those are in the areas of fraud control, paperless office in terms of payables and receivables and then cash flow forecasting. Then I want to share some case studies in terms of some firms who have had real success in implementing Bill.com and what it’s done for their firms.

Let’s get started. You take a look at these numbers and what do these numbers have in common. Let me tell you. These are showing you not only the inefficiencies but actually the exposure that clients, your clients, are up against when it comes to managing their daily finances. Today it takes about $38 for one single bill to be processed in a company. If you think about a smaller business, often times it’s the small business owner involved and that $38 can start climbing closer to $80 or $90.

If you look at actual fraud loss in an organization, on average about 5% of annual revenue is loss to fraud and that number actually goes up as you get with more smaller businesses. And then in surveys 80 analyst firms have done extensive research on understanding cash flow forecasting. What they found is that 57% of the small businesses find it extremely frustrating to forecast cash flow. So these are some real pain points for clients today.

Why is that? When you think how are you actually servicing your clients today, it’s probably a pretty manual process. We talked to a lot of firms and people are out there collecting the invoices, going to the client’s office to get that information and then coding it into the system. But then there is a lot of going back and forth in terms of tracking down approvals, getting the information, getting the insight into when do I pay that and then it’s the actual check in the mail going to the vendor and the vendor waiting for the payment and calling you often times.

That is actually an interesting one and I think this is a good time to pass it over for a polling question Sandi, in terms of how do people service today.

Sandi: Sorry Christy I was muted. We’re asking how do you collaborate today. What we need you to do is choose the most common answer. We were going to make this all of the above and I think we can only choose one. So if you’ll just say how do you collaborate today the most frequently and get your vote in for this polling question. I’ll give you a couple of more minutes and then we’ll share the results.

Okay we got about every in and here are the results. Interesting, we’ve got most people are in the handwriting, most people are dialing transactions and I think that’s interesting. Christy I’m going to give it back to you to move forward here.

All right thank you. So that poll definitely showed what seems to be the case out there today. You might be downloading transactions into the accounting software but you still have some multiple systems in terms of manual process of writing checks. Even if you’re doing online bill payment you’ve got a separate system from the accounting software where you’re having to reconcile and enter in transactions and so there is a lot of effort going on.

One thing to think about in terms of what does this mean? Does this look like we’re moving into more of a commodity service of truly just dealing with the paper and timing of when we’re going to pay something? This shows frustration with this process.

When you think about it, as individuals, and our clients as well we’re really living a different life out there in terms of how we live our daily life. We are in the cloud and very connected. So people are using Facebook and downloading transactions with online banking and photo sharing.

So this is what you’re doing in your daily life but yet when it comes to our business processes we’re still working with the manual process. If you think about how can we take those processes and move it and provide that for our clients, now we’re moving from what typically can be more of a replaceable service provider to an indispensable business partner and that’s really where we want to move. And that’s what I’m going to talk to you about today in terms of what Bill.com can do to enable that for you.

We’re going to talk specifically about 3 services – fraud control, paperless office and cash flow forecasting. As I mentioned earlier, these are pain points for your clients.

Let’s talk about fraud and I mentioned that 5% of annual revenues is lost to fraud. Usually about 49% of the time you’re not able to recover those losses. Why is that? Where is the exposure? Often times this is due to a lack of internal controls and not having the right proper controls in place and we talked a little bit about that. Business processes and maybe the same person is writing the check that is approving the check. You have payment fraud that check stop is out there and it’s the number one reason way that checks are manipulated. Checks are taken in the mail and the payee the dollar amount is changed or the account information is taken off that check, so there is a lot of exposure out there.

Let’s look at this in terms of also what are some of the 2012 reports, what are some of the top schemes out there and we show this by employee size in terms of large and small employees. You can see billing is the top scheme that is out there, check tampering. Again, while you might think its okay to be doing the checks you might often be putting your client at more risk.

What often times what clients and firms will do is say let’s put together some processes to protect ourselves. People will go ahead and add separation of duties and manual controls and put a lot of extra steps into the process to try and have some more control in there. But what is going on is you’re providing a lot of extra burden and cost into the system in order to get more control. So what is happening here is it’s difficult to track payments made to vendors because it is such a manual process.

There is kind of incomplete or disorganized data because again it’s paper. We’ve got multiple locations going on in terms of sharing data and so that is also causing, as you can imagine, double entry into systems, more room for error, you have increased errors in terms of you have your banking systems trying to enter things twice, you don’t have visibility to things and so you’re not able to protect cash flow.

So these are all problems that we know and have been talking about. Let’s go now to the next polling question.

Sandi: Let’s ask, what fraud controls do you have in place? We would love to…go ahead and choose the most frequent one. That’s good to see that you guys jumped on that question really fast and that’s great.

Here we go and let’s share this. Most of them say enforced separation of duties which is great. We’ve got a couple more there and so that’s interesting stuff. Let me turn it back to you Christy.

That was really good to see and it looks like a lot of people are on top of it and really moving to what I’m about to present, which is what are 5 ways you can go ahead and protect your clients from fraud? One clearly which look like half of you were doing is enforcing a separation of duty, of automated work processes. So you take more steps out of the process and you’re eliminating the ability to introduce errors. You’re taking the errors out. Eliminating checks and we’re going to talk about that today, performing more regular internal audits and then moving to a paperless office environment, which I’ll talk more about today as well.

Clear separation of duties, one thing that Bill.com provides today is as part of the setup you’re asked in the system to set up specific roles that each user will have. So whether someone is only going to be an approver and only going to approve bills and do not have the ability to go in and pay those bills; you also can separate the person who is entering bills from people who are approving them. So if someone isn’t making the coding correctly or changing things slightly we’ve got that double check in the system. So there are a lot of checks and balances along the way that is something you need to put into your system. And when you have it in Bill.com its online and it’s much more streamlined where you’re eliminating steps involved in that process.

This is a screen that shows you there are 5 default roles that Bill.com has. We do include about 28 unique custom entitlements so that you can really take your process that you use internally and customize it to fit your needs and so we’ve introduced a lot of custom roles over the years for that. But you can see here some of the basic things that we allow you to do.

Your administrator is really your person who has access to everything but then there are the checks and balances along the way in terms of the approval and payer.

Sandi: I’m going to ask you to talk as loud as you can and kiss your microphone. Thanks.

Yes and I’ll talk loud and slow for everybody. The next one is automate work process and I’m going to show you that when we talk about the paperless. The idea here is you want to, as I mentioned, set up unique roles for people but then you want them to also have different members doing different things in the process and again you have this separation of duty there.

By automating work process you’re eliminating excessive data entry. So with Bill.com we take all that paper, the invoices, the contracts, everything associated with your payables and receivables and we create a paper and you put that into an online document management system and you enter it one time. Once it is entered it syncs with your accounting software so you don’t have to go in and enter additional information later. It syncs and there is a 2 way sync going on between your accounting software and Bill.com. So if they’re making changes to vendors or charts of accounts we’re keeping track of that and we’re synching those together and so that’s really important.

Another thing about automating work process is you’re able to collaborate with everybody online and you’re able to track that collaboration so that you can see if there were changes or denials made in a payment process why did that happen? What date did that happen on? So you have clear transparency into the process.

The other thing you do is you can automate reminders and so you’re speeding up the work process. Typically, you can imagine a payable going through a company and it might take a few weeks to go from entering that bill, to coding it, to approving it and to checking with contracts, etc. and that can take a series of weeks. But when you now automate that and put it online you’ve just expedited and taken something that might take 3 weeks down to 2 days.

So this shows you some screens that are coming straight from Bill.com and I talked about an audit trail. What we do here is this screen will show you that we’re tracking every step of the way what has happened from the minute it’s entered if something has changed on that, when someone approves it and all that information is captured there for you, as well as, the payment remittance information. That also is captured online. Checks that are cleared at the bank by the vendor, those check images are also captured in Bill.com. So you have transparency from the beginning to the end and so that’s very important.

Another thing we do is we talk here about batching transactions. When payments are made through Bill.com because we move the money on behalf of your client, we’re actually reconciling that in the accounting software for you but we’re actually just making one debit at the bank account. So reconciliation is streamlined substantially and all the reconciliation is sitting in the accounting software for you.